Cyber Readiness Institute launches program to help businesses

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Cyber Readiness Institute launches program to help businesse

Kiersten Todt discusses how cyber security is becoming a distinguishing factor for consumers.

This is a rush transcript from "Special Report," December 17, 2018. This copy may not be in its final form and may be updated.

SHANNON BREAM, FOX NEWS ANCHOR: Great to see you tonight, Dana. Thank you so much.

We begin with a Fox News alert.

I'm Shannon Bream in for Bret Baier.

With just four days to go there appears to be some signal that President Trump and congressional Democrats may strike a deal to keep the government open past the Friday midnight deadline. At least that's what White House is saying. The President is insisting on billions of dollars for border security and his wall.

White House officials think they can strike a deal. On the Hill though, it's anybody's guess because folks there aren't aware of any plan.

Chief White House Correspondent John Roberts starts us off tonight with breaking details. Good evening -- John.

JOHN ROBERTS, FOX NEWS CHIEF WHITE HOUSE CORRESPONDENT: Good evening to you -- Shannon.

The White House legislative affairs director Shahira Knight has been up on Capitol Hill all afternoon looking to put together some sort of Christmas miracle and it's beginning to look like the White House's hard line on a border wall may not be so hard after all.

Out there already is a proposal for a continuing resolution that would keep the government funded through the end of fiscal year of '19 -- that's September 30 of 2019. It would provide $1.6 billion for about 65 miles of border fence through the Rio Grande sector of the southern border. That is one of the most active areas when it comes to cross border migration. It wouldn't all be dedicated toward building a wall but certainly a lot of it would.

Democrats have already indicated that they may be able to support such a proposal in the House. And there is an increasing sentiment among many Republicans that they would rather go for a continuing resolution than shutdown the government over Christmas.

Now the $1.6 billion is far less than the $5 billion that the President has been looking for. So I'm told by sources, watch for the White House to seek a legal opinion on whether it can use money from the Defense Appropriation, and this would be for Defense construction about $3.4 billion to start building portions of the wall through the Department of Defense budget.

Now such a move would likely provoke howls of outrage among lawmakers on Capitol Hill who would complain and make the case that the President can't just shift around money in the Defense budget as he pleases. But the White House may try to find a legal opinion allowing them to at least do some of that.

Now while the President is likely going to have to accept less if he wants a deal this week than what he was looking for, he did find other reasons to be optimistic that some of the other changes that he is looking for in other areas may in fact come to pass.

(BEGIN VIDEOTAPE)

ROBERTS: President Trump failed in his attempts to repeal and replace Obamacare but found new reason for hope after a federal judge in Texas ruled that Obamacare is unconstitutional. The President tweeting "The deductible which comes with Obamacare is so high that it is practically not even usable. Hurts families badly. We have a chance working with the Democrats to deliver great health care."

The President's optimism was not shared by Democrats. Instead of looking for compromise, they shredded the ruling.

SEN. CHUCK SCHUMER, D-N.Y., SENATE MINORITY LEADER: It's an awful, awful ruling. We're going to fight this tooth and nail. And the first thing we're going to do when we get back there in the Senate is urge, put a vote on the floor urging an intervention in the case.

ROBERTS: It will ultimately fall to the Supreme Court to determine Obamacare's constitutionality. Until then the law will stay in place.  Some members of Congress pledge they will try to find a solution before then particularly on the issue of pre-existing conditions.

REP. MARK MEADOWS, R-N.C.: We've got to find some solution to lower healthcare costs to make sure that all Americans have affordable healthcare that cover pre-existing conditions. Hopefully we'll be able to hear that.

ROBERTS: President Trump also had an eye on another dizzying dive in the Dow today warning that it would be a mistake for the Fed to raise interest rates again this week. The President tweeting "It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning, and China way down the Fed is even considering yet another interest rate hike. Take the victory."

(END VIDEOTAPE)

ROBERTS: And on the subject of staff changes, the President is expected to name a replacement for the departing Secretary of the Interior Ryan Zinke.  Zinke is expected to leave by the end of the year. He was at the White House today meeting with the President and Fox News has been told that the OMB director Mick Mulvaney will take over the reins as chief of staff on January 3rd from the departing John Kelly -- Shannon.

BREAM: All right. John Roberts, live at the White House -- thank you very much.

And as John mentioned, huge losses again today on Wall Street. The Dow lost more than 2 percentage points for the 4th time this month, finishing down 508. The S&P fell 2 percent, off 54. Nasdaq was down 2.25 percent losing 157.

All right. Let's get some insight on what is happening. Kristina Partsinevelos of Fox Business Network joins us from New York. Good evening -- Kristina.

KRISTINA PARTSINEVELOS, FOX BUSINESS NETWORK CORRESPONDENT: Good evening - - Shannon.

So like you mentioned, it was a rocky day on Wall Street with a huge selloff in actually the last hour of the trading day. You had U.S. equity indexes slide to their lowest close in 14 months. So all markets pretty much like you mentioned down 2 percent.

Investors though have to grapple with several issues. Firstly, there is a high chance the Federal Reserve will increase interest rates on Wednesday making it the fourth hike of the year.

Investors will pay close attention to Chairman Jay Powell and his wording.  Will we see just two rate hikes in 2019 or more? Keep in mind when the Fed hikes interest rates that affects all debt, like corporate debts, student loans and mortgages.

Secondly there is this continuous concern about global growth slow down.  Weaker economic data from China and Europe are pushing analysts to trim forecasts. Those fears weighed heavily on oil today which closed below $50 U.S. a barrel, a 14-month low.

Also the U.S. dollar continues to climb higher and that makes oil more expensive for other countries further hurting demand. And you've got a supply glut so these are all reasons why we saw the energy sector lowered today.

And lastly, you've got healthcare stocks that did take a tumble after a Texas judge ruled that Obamacare was unconstitutional. So you have three stocks on your screen right now -- Molina, HCA, and Community Health Systems. Look at that, down 13.5 percent because of the ruling.

Overall though, the Dow and the S&P are on pace for their worst December since the Great Depression even though December is typically a positive month for markets. So investors are still waiting for that Santa rally -- Shannon.

BREAM: All right. As are we. Kristina -- thank you very much.

PARTSINEVELOS: Thanks.

BREAM: Former FBI director James Comey was back in front of lawmakers today. They're seeking answers on FISA abuse, whether Comey used media leaking as a strategy and the origination of the Russia probe.

Chief intelligence correspondent Catherine Herridge tells us what happened today. Good evening -- Catherine.

CATHERINE HERRIDGE, FOX NEWS CHIEF INTELLIGENCE CORRESPONDENT: Well thank you -- Shannon. After the closed door session, the former FBI director James Comey took some reporter's questions but he took none of the blame for any damage to the bureau's credibility.

(BEGIN VIDEOTAPE)

JAMES COMEY, FORMER FBI DIRECTOR: The FBI's reputation has taken a big hit because the President of the United States, with his acolytes has lied about it constantly. But that damage has nothing to do with me.

HERRIDGE: Comey stood by the FBI interview of former national security advisor Mike Flynn though critics emphasized Flynn was discouraged from having a lawyer and was not warned that any false statements could be prosecuted.

Comey declined to answer Fox's questions about whether he mishandled classified information when he shared with his lawyers memos documenting his conversations with the President.

COMEY: That's nonsense. I'm very proud of the way the FBI conducted itself.

HERRIDGE: Heading into the nearly six-hour session behind closed doors, House Republicans were focused on Flynn.

REP. JIM JORDAN, R-OHIO: For him it's all -- it's all about Jim Comey.  And he thinks the rules don't apply to him --

HERRIDGE: Late Friday, the FBI released this heavily redacted memo used by Comey to brief incoming President Trump about the anti-Trump dossier, the DNC and Clinton campaign-funded opposition research. The FBI memos described them as quote, "private clients".

MEADOWS: He indicated -- seemed to indicate the other day that he was not aware of that until he read reports long after he was gone. I find that very hard to substantiate based on other evidence.

HERRIDGE: On Fox News, the President's personal attorney said his client's written answers for Robert Mueller are sufficient.

CHRIS WALLACE, FOX NEWS ANCHOR: If the special counsel does want to interview the President?

RUDY GIULIANI, TRUMP PERSONAL ATTORNEY: Over my dead body. I am disgusted with the tack which they have used in this case.

HERRIDGE: The President's weekend attacks on the FBI-Michael Cohen investigation calling his former personal attorney a rat and the legality of a Cohen search warrant are cited by Democrats as more evidence that the Mueller probe needs protection from Republicans.

REP. ELIJAH CUMMING, D-MD.: They seem to be wanting to play defense counsel for the President.

REP. HANK JOHNSON, D-GA.: The Republicans will continue to rake Jim Comey over the coals for as long as they can and it appears to be at the direction of President Trump.

(END VIDEOTAPE)

HERRIDGE: In a separate development in Virginia, an indictment was unsealed for two former business associates of national security advisor Michael Flynn for illegal lobbying and making false statements. The timing is noteworthy coming less than 24 years before Flynn is sentenced in Washington tomorrow -- Shannon.

BREAM: All right. Catherine Herridge, live on the Hill for us tonight.  Thank you.

Senate majority leader Mitch McConnell says he will hold a vote on a criminal justice reform bill later this week. The legislation to ease federal sentencing laws is running into opposition from some conservatives.  They want to exclude more prisoners from earning early release to a half- way house or home confinement. Supporters of the bill are warning that too many amendments could kill the compromise.

Long-time Republican Senator Lamar Alexander of Tennessee says he will not run for reelection in 2020. Alexander was elected to the Senate in 2002.  He was governor from 1979 to 1987. He says it's time for someone else to have the privilege of serving in the Senate.

Democrats are fighting amongst themselves tonight over the future of what could be the party's most valuable asset -- information about you.  Correspondent Peter Doocy explains from the capitol tonight.

(BEGIN VIDEOTAPE)

PETER DOOCY, FOX NEWS CORRESPONDENT: There's a deep divide at the DNC over data because officials might not know their candidate will be in 2020 but they know millions of e-mail addresses and phone numbers to help pitch that person to voters.

Chairman Tom Perez wants to put all that info into one place like Republicans do. But rising star Alexandria Ocasio-Cortez writes "This is a terrible idea."

And another official Ken Martin tells the Wall Street Journal "The DNC doesn't even realize they are potentially slitting their own throats here."  Martin runs the Association of Democratic Committees and doesn't want the DNC directly involved with the voter file.

Perez was less than pleased when he heard that, firing off a mass e-mail that says "The counter proposal would undoubtedly result in a splintering of the Democratic data ecosystem as candidates would work off of different and competing data sets for the first time since the national voter file was built. In short we are perplexed and dumbfounded by this proposal."

ADRIENNE ELROD, DEMOCRATIC STRATEGIST: When Tom took over as the chairman of the DNC the data operation was in complete shambles. It was something that Secretary Clinton had to deal with as a candidate in 2016.

So it was the number one first order of business. And it's certainly no surprise that there's going to be, you know, a little bit of a debate internally. And unfortunately it spilled out publicly.

DOOCY: The Trump campaign is trying to stay ahead making data guru Brad Parscale campaign manager so veterans of Democratic campaigns are putting a premium on catching up.

ELROD: What matters the most is that we get it right because a DNC without a strong data operation, it doesn't -- it's irrelevant.

(END VIDEOTAPE)

DOOCY: The DNC drama unfolded over mass e-mail this weekend. But tomorrow the key players are going to meet in person in Washington, D.C. so we might soon have a better idea about where the power over and control of the Democrats' most precious political commodity, their data is heading -- Shannon.

BREAM: Peter Doocy -- thank you very much. We'll talk about it with the panel.

Well, another potential disruption tonight in the U.S. relationship with Saudi Arabia. The Kingdom is rebuking U.S. senators for their formal linking of the murder of a Saudi journalist to the Crown Prince.

Senior foreign affairs correspondent Amy Kellogg has the latest tonight on the escalating war of words.

(BEGIN VIDEOTAPE)

AMY KELLOGG, FOX NEWS SENIOR FOREIGN AFFAIRS CORRESPONDENT: The Saudis were incensed that the Senate finally voted to lay the blame for Washington Post columnist Jamal Khashoggi's murder at Mohammed bin Salman's feet. In a statement, Riyadh rejected the Senate's move and accused it of quote, "latent interferences in the Kingdom's internal affairs, undermining the Kingdom's regional and international role."

The statement came three days after the vote.

SENATOR BOB CORKER, R-TENN.: This is now unanimously -- unanimously the United States Senate has said that the Crown Prince Mohammed bin Salman is responsible for the murder of Jamal Khashoggi. That's a strong statement. I think it speaks to the values that we hold dear.

KELLOGG: President Trump has said he sees nothing to impugn the Crown Prince, known as MBS whose friendship he has deemed critical for U.S. national security and the economy.

MARTIN REARDON, THE SOUFAN GROUP: It's important to maintain that relationship with Saudi Arabia. But it does not depend on MBS staying in power. The alliance is based on each country needing the other for a certain reason. But it was important that the Senate took the action that they did.

KELLOGG: The Senate also voted to withdraw its support of Saudi for its war in Yemen against the Houthi rebels, a war that has seen atrocities on both sides and has led to widespread starvation of children.

REARDON: The world at large knows that this -- this war is not just war.  And there's a lot of questions, why has the U.S. provided support for it?

(END VIDEOTAPE)

KELLOGG: The senators' votes at this point are seen symbolic, not likely at least in the near term to lead to any action. But they have shined a light on issues many see as worthy of debate -- Shannon.

BREAM: Amy -- thank you very much.

Up next, residents of a California community destroyed by wildfire return to what is left of their homes -- we talk about how to prevent disasters like this in the future.

First, here's what some of our Fox affiliates around the country are covering tonight.

Fox 11 in Los Angeles, as California backs off a proposal to impose a tax on text messaging. The move came after the Federal Communications Commission in Washington declared text messaging to be an information service, not a telecommunication service and thus not subject to a surcharge under California law.

Fox 13 in Tampa as Republican Governor Elect Ron DeSantis wants to delay an amendment restoring voting rights to more than a million felons who have served their time. The amendment passed with nearly 65 percent of the vote in November. DeSantis says the legislature should clarify the language in the bill before sending it to his desk. Supporters of the amendment say the Governor-elect is dragging his feet.

And this is a live look at New York from Fox 5. The big story there tonight, Google is spending more than a billion dollars to expand operations in New York City. The company's chief financial officer says it is creating a 1.7 million square foot campus that includes lease agreement along the Hudson River in Lower Manhattan.

That is tonight's live look outside the beltway from SPECIAL REPORT.

We'll be right back.

(COMMERCIAL BREAK)

BREAM: President Trump says he is getting involved in a story we updated for you on Friday -- a murder charge against a decorated American war hero.

We told you former Green Beret Major Matthew Goldsteyn is being prosecuted for the death of a Taliban bomb maker. Well now, the Commander-in-chief is going to take a look. The President tweeting today, "At the request of many I will be reviewing the case of a U.S. military hero, Major Matt Goldsteyn, who is charged with murder. He could face the death penalty from our own government after he admitted to killing a terrorist bomb maker while overseas."

The remaining residents who fled from the deadliest wildfire in California history were allowed to return to their homes over the weekend. All evacuation orders were lifted in Paradise, more than a month after the fire broke out. It killed at least 86 people and destroyed 14,000 homes in the nearby towns and communities.

Tonight the argument of who and what is to blame is intensifying.  Correspondent Claudia Cowan reports from Paradise.

(BEGIN VIDEOTAPE)

CLAUDIA COWAN, FOX NEWS CORRESPONDENT: Wind driven infernos like the Camp Fire in Paradise used to come once in a firefighter's career. Not anymore.

UNIDENTIFIED MALE: We have fire tornadoes. We have fire jumping the whole football fields per second. That's the speed that fires are measured.

COWAN: Experts say extreme winds, continued drought, rising temperatures and other complex factors are making western wildfires more frequent and severe.

Sparking a political firestorm on Twitter President Trump blamed quote, "gross mismanagement of the forest". California Congressman Tom McClintock specifically points to restrictions on logging dating back to the 1970s.

REP. TOM MCCLINTOCK, R-CALIF.: We're carrying about four times the tree density in the Sierra that the land can support. In that morbidly overcrowded condition, the trees lose their natural resistance to drought and disease and pestilence and ultimately be catastrophic wildfires.

COWAN: But large scale timber operations are expensive and controversial.

MARK SCHWARTZ, ENVIRONMENTAL SCIENCE PROFESSOR: UNIDENTIFIED MALE: We have people who live in this environment because it's the woods and they don't want to see a timber operation in their backyard.

COWAN: Scientists say any discussion of forest management must also include setting fires on purpose.

EDWARD SMITH, NATURE CONSERVANCY OF CALIFORNIA: Fire can be good. And is a necessary and normal part of forests in the west. We need to reintroduce fire safely. We need to bring it back thoughtfully and carefully in areas where it is appropriate.

(END VIDEOTAPE)

COWAN: But here too, controlled burns to get rid of dry brush and debris take money, manpower and political will. Experts say the challenge is directing the same level of resources now being used to put the flames out into reducing the threat of wild fires in the first place -- Shannon.

BREAM: Claudia Cowan -- thank you very much.

The board at CBS says former chairman Les Moonves will not receive his $120 million severance package. It says Moonves was fired with cause over sexual misconduct allegations. The board says Moonves failed to cooperate fully with investigators looking in the allegations and it cites what it calls Moonves' willful and material misfeasance in violation of company policies and breach of his contract. No response yet from Moonves.

Well, our next story involves a liberal Ivy League institution accused of censoring its own students and violating their constitutional rights. It concerns fraternities and sororities and it has national implications for millions of young people.

Correspondent Molly Line reports tonight from Boston.

(BEGIN VIDEOTAPE)

MOLLY LINE, FOX NEWS CORRESPONDENT: The Greek life at Harvard is fighting back against a school policy that sanctions students who join unrecognized single gender social organizations.

ELLEN ROTHSCHILD, HARVARD GRADUATE: So I think that this policy creates an atmosphere of fear on campus where students are just afraid to be A part of something because they don't know what could happen to them.

LINE: For decades Harvard has tried pushed backs against the historic, secretive and selective all-male groups known as final clubs -- previously noting reports of deeply misogynistic attitudes reflected by the long- standing refusal of many clubs to admit women.

But the school's policy may have hit the wrong groups. Now a half dozen unrecognized fraternities and sororities are taking the school to court because they say a right protected by the constitution is at stake.

EMMA QUINN-JUDGE, ATTORNEY: Our claim is a claim of freedom of association like we protect free speech rights.

What Harvard is doing is threatening, intimidating and coercing students in the exercise of their rights.

LINE: Under the schools current policy those joining single gender clubs like the fraternity Sigma Chi or sorority Alpha Phi risk being barred from leadership roles and student organizations including athletic teams and being ineligible to receive endorsements for prestigious fellowships and scholarships.

A Harvard spokesman defended the policy arguing it's designed to focus on groups that quote, "advancing principles of inclusivity" and its support group says they quote, "transform into organizations that alight with the educational philosophy, mission and values of the college".

But the recent clamp down is striking sororities perhaps hardest of all.  2017 Harvard grad Ellen Rothschild was chapter president of the Iota Tau chapter of Alpha Phi.

ROTHSCHILD: They were there. They were thriving. Now most of the women's groups are gone.

(END VIDEOTAPE)

LINE: The policy and its penalties apply to the class of 2021. But fraternities and sororities all across the nation are concerned that they could be next. So they launched a petition and a social media push to stand up to Harvard -- Shannon.

BREAM: Molly Line in Boston -- thank you.

Well, up next, some help for businesses trying to protect themselves from devastating cyber attacks.

First, beyond our borders tonight.

A suspected gas explosion destroyed wooden buildings, housing, a restaurant in a real estate office in northern Japan Sunday night. 42 people were hurt. The powerful explosion shook nearby buildings, shattered windows and scattered wooden debris across the area.

And a powerful bomb exploded today outside the southern Athens headquarters of Greece's private Sky broadcaster which has been strongly critical of government policies. No injuries reported there. There's no immediate claim of responsibility for the bombing.

British Prime Minister Theresa May says overwriting or re-voting on the Brexit referendum would do irreparable damage to trust in democracy.  British lawmakers have been unable to agree on a contract on how to leave the E.U. May has reschedule a parliamentary vote on a deal until mid- January.

Just some of the other stories beyond our borders tonight.

We'll be right back

(COMMERCIAL BREAK)

BREAM: A report compiled by private researchers and released today by the Senate Intelligence Committee says active and on-going Russian interference, operations still exists on social media platforms. The report adds the Russian operation discovered after the 2016 election was much broader than once thought.

The report says Russia shifted much of its activity to Instagram after Congress focused attention on Russian influence on Facebook and Twitter.

Well, tonight my colleague Bret Baier talks with one expert on cyber security about what industry leaders are doing to protect small and medium sized businesses from potentially devastating attacks.

BRET BAIER, FOX NEWS ANCHOR: Shannon, thank you. Cyberattacks, a major issue not only for the government but businesses. Joining us Kiersten Todt, managing director of the Cyber Readiness Institute. Thanks for being here.

KIERSTEN TODT, CYBER READINESS INSTITUTE: Thanks, Bret.

BAIER: You have this new program that really businesses can take part of to deal with cyberattacks potentially. It launched today.

TODT: Yes. Exactly. So this is an output of the commission on enhancing national cybersecurity, and two of the leaders of that commission, Samuel Palmisano, the vice chair of the commission, and Ajay Banga, the CEO of Mastercard, I serve as the executive director, they came together when we were finishing the end of the commission to say what are the efforts that we want to continue with, and specifically focusing on small and medium sized businesses. So this program focusing on providing free tools and resources for small and medium sized businesses to help them become more cyber ready, create a culture of cybersecurity.

BAIER: Last week we saw in the news China hacking Navy contractors. The U.S. military is under attack all the time. But businesses are bombarded as well, always.

TODT: Right. Well, the Navy contractor, it's the latest example of the multiyear effort by the Chinese government to target this nation's defense industrial base. But the key lesson from this is the fact that all companies need to be paying attention to their supply chains. And small businesses are a critical component of global supply chains. So CRI was created to help those small businesses become more secure so that they can be a more secure component of the value chains.

BAIER: And it's free.

TODT: It's free.

BAIER: That's a good bonus.

TODT: It's a great bonus.

BAIER: What is the government, or can the government do more to help this process go forward?

TODT: So the government has a lot of efforts underway in outreach. The Department of Homeland Security, the Department of Commerce. And recently Congress passed legislation that tasks the National Institute of Standards and Technology to work with small businesses to come up with a public- private approach to helping small businesses. And I think the key whenever we're dealing with the private sector and industry is to ensure that government is working together and that the solutions are collaborative.

BAIER: Because it's only increasing, right? The hacks, the attacks, it's only stepping up?

TODT: Exactly. So when we see a new event and we talk about how this is the worst we have ever seen, that's only going to happen because we continue to -- the tactics, the techniques, the procedures improve with time.

BAIER: China is obviously a big factor here, but there are all kinds of actors, right?

TODT: There are all kinds of malicious actors. And we look at all the breaches that we've seen, most recently Marriot. And I think what we need to step back and take a look at is we are recognizing that personally every individual has information that has become vulnerable. And what this means now is that individuals have to start taking more responsibility for the security of their data. And what that also means is that when we as consumers are choosing airlines, hotels, cars, that we need to start seeing security as a distinguishing factor and something that we'll pay more for because it's important to us because we want to secure our data.

BAIER: How do businesses take advantage? Where do they go?

TODT: So www.CyberReadinessInstitute.org. And there is in the upper righthand corner there is a log in, and a register icon. So you just sign up and now you'll have access to the five-step program for free.

BAIER: OK, and the hope is that they take advantage television to improve security not only for them but for others.

TODT: Exactly. The hope is that we impact ecosystems and global value chains of which small businesses are key factors.

BAIER: OK, Kiersten, thanks so much for being here.

TODT: Thank you, Bret.

BAIER: Shannon, we'll send it back to you.

BREAM: Bret, thank you.

Who blinks first on the shutdown showdown? We'll get some thoughts from our panel when we get back.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

MERCEDES SCHLAPP, WHITE HOUSE STRATEGIC COMMUNICATIONS DIRECTOR: We're going to find ways to get to that $5 billion and make sure that we increase funding not only for the physical barrier but also for technology and for personnel.

SEN. CHUCK SCHUMER, D-N.Y., SENATE MINORITY LEADER: President Trump should understand there are not the votes for the wall in the House or the Senate.  He is not going to get the wall in any form. Even the House, which is a majority Republican, they don't have the votes for his $5 billion wall plan.

(END VIDEO CLIP)

BREAM: All right, so let's bring in our panel to talk about how they get to some kind of solution. Chris Stirewalt is politics editor here at Fox News, Mollie Hemingway, senior editor at The Federalist, and Charles Lane, opinion writer for The Washington Post. Welcome to all of you.

All of us this afternoon, our phones blowing up, the back and forth what's happening, senators on the Hill going into meeting, saying I don't know about any kind of deal. John Roberts reporting from the White House tonight that the president is considering getting it to $3.4 billion of the defense budget, of their budget, Chuck, to get this wall done. Can he do that?

CHARLES LANE, OPINION WRITER, WASHINGTON POST: I believe what John said was they're seeking a legal opinion that we'll enable them to do that, and since I'm not privy to those laws, I don't know. If they don't know, how would I know?

But the big picture is that, once again, they are fighting over this wall funding, which, let it be remembered, was supposed to come from Mexico back at the beginning. But now it's gone down, even from $20 billion was the price of the big thing now to $5 billion, and they can't even get that.

I think the president threw his own team, his own fellow Republicans kind of a curve when he said I will be proud to shut down the government over this, and I think a lot of them on the Hill are like, wait, what do you mean? We are trying to avoid the blame for this. And ever since then he hasn't been able to organize a response. I think people up on the Hill are a little nervous that their leader in the White House doesn't understand their predicament, doesn't quite understand the politics of this.

On the other hand, I do think what the president understands is the politics of the Republican base which does appreciate seeing him fight tooth and nail for what he promised to do in the campaign.

BREAM: Yes, Mollie, whether it's with the Democrats or establishment Republicans, the same thing, he made this promise over and over again. He still does it at rallies. It's always the chant of "build the wall" and he told them that's what I'm going to do.

MOLLIE HEMINGWAY, SENIOR EDITOR, THE FEDERALIST: This is one of his signature issues. This is what he began his original presidential campaign with. And he seems to think this is a good time to go after it.

I think Chuck is absolutely right that this has been a curveball for Republicans. But of course, the problems with border enforcement and border security, they developed in a bipartisan fashion. Both parties seem to have an interest in not solving anything. I think a lot of people thought President Trump actually had a stronger hand several months ago.  But he knows that enough budgets have been passed that this won't be a complete shutdown of the government, and that it might be something that he thinks he can get through in part because you can't play all of the tricks and gimmicks that you usually do with the government shutdown of closing the most popular destinations and acting like the end of the world is at hand.

BREAM: And Chris, to the issue of Nancy Pelosi, who will, if nothing changes, soon be the speaker of the House once again, Senator Kennedy pointed out tonight what impetus, what motivation would she ever have to negotiate with him over this, because the Democrats take over the House in a matter of weeks.

CHRIS STIREWALT, FOX NEWS POLITICAL EDITOR: Right, the situation materially worsens for Republicans as of January 3rd, as soon as the Democrats take over the House. Then there's no more -- it materially works for Republicans from a political standpoint. From a political standpoint I think the Republicans are going to be quite relieved to be a minority. I think they are tired of being in the majority, they're tired of having to pass legislation and say things, and this will let them just be a bunch of boo-birds in the back of the House hollering at Democrats and what they're doing.

But we will remember this -- we are talking about, at the current, 900,000 federal employees, half of whom would be furloughed, not go to work, not get paid and not go to work. The other half go to work and don't get paid.  We know what happens --

BREAM: But everybody eventually gets paid?

STIREWALT: Yes, the joke is always on taxpayers and the joke is always on voters because after these politicians have their hissy fits and everything's done, it ends up costing extra money at the end, because everybody gets their backpay anyway. But even so, if you go on at Christmas time with nearly a million federal workers not getting their paychecks, that's going to cause difficulty.

BREAM: OK, so, also some difficulties on the Hill today because former FBI director James Comey was back there talking with House Republicans and Democrats from Judiciary and Oversight Committees. That's also something that's probably going to radically change in January once Democrats gain control of those committees.

But there is some tweeting back and forth amongst all of this. The president tweeting on this about Michael Cohen. "Remember Michael Cohen only became a "Rat" after the FBI did something which was absolutely unthinkable and unheard of until the witch hunt was illegally started.  They broke into an attorney's office. Why didn't they break into the DNC to get the server or Crooked's office?" Assuming he means Hillary there.  Comey tweeting back, "This is from the president of our country lying about the lawful execution of a search warrant issued by a federal judge. Shame on Republicans who don't speak up at this moment for the FBI, the rule of law, and the truth." Chuck?

LANE: Well, I guess I have to say I share Jim Comey's astonishment at that tweet, because whether it was a conscious lie or not, not a whole lot of it is true. There was a properly executed warrant. It wasn't like they barged in the door or broke it down or something. And the president is adopting a tone and a language that's totally unbecoming of the office to refer to somebody as a rat even if you don't like him, even if he testified against you. It's extraordinary.

Having said that, I also think it's kind of extraordinary that Comey over time now has become so enmeshed in this, so partisan. I am not sure that's necessarily to his personal benefit. But on this one, at least on the substance, I think he is right.

BREAM: OK, so today he comes out of some of the questioning and he talks about the FBI's reputation as taking a huge hit. Catherine Herridge reported on this and uses part of the soundbite where he says but the damage has nothing do with me. And this comes after just days ago that we reported on he publicly said that they got away with something in the way that they took the Flynn interview, told him he didn't need an attorney, didn't advise him that lying could get you in trouble, which, hey, as a military guy and national security expert most folks would assume he would know. But for him to publicly talk about getting away with something against this administration doesn't help his case.

HEMINGWAY: No, and the fact that people laughed when he said it, or cheered, was also unbecoming of the country.

I totally agree with what Chuck is saying about the tweet being unbecoming for the president to use that type of language. But the deeper issue at hand is in fact about whether we are seeing abuse of prosecutorial discretion. We have a really good test case. We have the FBI and Department of Justice going after Hillary Clinton for breaking the law and classified information in which we saw the Department of Justice and FBI just bend over backwards, giving immunity, handing it out like candy, getting nothing in return, declining to prosecute anyone for false statements even though a ton of people had made false statements. And then just a few months later you have them going after anyone affiliated with the Trump campaign and squeezing them to within and inch of their life.

Whereas Hillary Clinton, all of her attorneys got immunity, you have the FBI going after Cohen and seizing his records, and using this pretext of Russia collusion that we now know -- a lot of headlines today were about how that whole Russia collusion story is falling apart. The centerpiece of that, that Michael Cohen had gone to Prague and traded money for information, it's all falling apart. And yet we still have this investigation, and it really was done differently than how Hillary Clinton was investigated.

BREAM: Fair comparison, Chris?

STIREWALT: Look, Republicans are going to continue to say Hillary was treated unfairly. And I believe that Mollie and other fair-minded, patriotic minded Americans would say, they just want equal protection.  Michael Cohen did a lot of bad stuff. Michael Cohen did a ton of bad stuff not related to the president, and some of it related to the president, some of it related and the campaign. He has pleaded guilty. He is going to prison.

I know that there are a lot of Republicans that say Hillary should be gone back after. It's time to drive the bus back around and look at Hillary Clinton again, and do it right this time, and take the findings of the inspector general's report and do it right with Hillary again, and that she should be held to account for her mishandling of state secrets as secretary of state, or for misdeeds of the Clinton Foundation. All fair.

The political predicament for this administration and for this president is the damage done because of the lies told about Stormy Daniels and campaign finance and really relatively minor stuff compared to what we're talking about in the rest of the investigation. And polls have illustrated it clearly, the president's credibility weakened. Trust in Mueller is up.  And as Mueller continues to get results, people are going to be less likely to hear from Trump as the aggrieved party.

HEMINGWAY: But what Mueller is not getting results on is the original thing of collusion. And that's what everyone was sold this wide-ranging Special Counsel investigation. They're not getting it.

BREAM: We'll wait and see, because it doesn't look like, despite our many predictions, that it's coming anytime soon. But we're standing by. Panel, standing by as well. Next up, Democrats fighting other Democrats over information about you.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TOM PEREZ, DEMOCRATIC NATIONAL COMMITTEE CHAIR: I was walking into a Democratic National Committee that was in dramatic need of a major overhaul. In short, we needed to rebuild. We needed to organize. We needed to modernize. And we needed to win. I come to you roughly probably about 21 months since that date, and the Democratic Party is back.

(END VIDEO CLIP)

BREAM: The DNC Chair Tom Perez there. And now they're going to meet tomorrow -- our panel is back. And we're hearing that there's going to be some discussion. We had a heated email from him over the weekend about how they're going to use or share data. Chris, there's some internal differences on this.

STIREWALT: Your context here is that the Democrats are right badly, badly, badly outgunned on their data operation. Hillary Clinton ate alone. She left a DNC that was a laughable shell. She ran her own campaign, everything through Brooklyn.

Republicans, meantime, the Trump campaign teamed up with the RNC. They have a robust data operation that they have continued humming along with.  They know lots and lots and lots, and have already a track record to prove that they can take it to the field. The Democrats are stumped on this.

And here's what's going on. You have the chairman of the Democratic National Committee that says to his party, screaming we are in huge trouble. We have to do something dramatic here. And what he is getting is that the fiefdoms on the state level, these state chairmen say we are not sharing our data with you. We're not breaking down our stuff. And Perez is frustrated because he knows they're only going to have a matter of weeks to ramp up their data operation once they have a nominee.

BREAM: Yes, if they don't coalesce now. Alexandria Ocasio-Cortez, congresswoman-elect, progressive darling, tweets this is a terrible idea, the idea of them sharing that information and getting it together now.

HEMINGWAY: There further might be a little bit of context that there's some competing financial interests, one party wants a private firm to handle it, the other wants the trust to handle it. But it's also true that this is in the context of this great centralized control of the Democratic Party that didn't work out so well for them in 2016. It was a very top down measure of making sure Hillary Clinton was the nominee. That really angered some of the more progressive wing, and they understand that who controls various assets also controls the direction of the party, and there's needing to be a debate about whether you go for a 50-state strategy, which Tom Perez is very much in favor of, or whether you let some of the more progressive elements experiment and try and get votes that way.

BREAM: OK, we think about, the way you describe it, Chris, it just sounds so anathema to the way we think about under President Barack Obama and candidate Barack Obama. Here is something looking back on this. This is from Suraj Patel, Democratic strategist.

(BEGIN VIDEO CLIP)

SURAJ PATEL, DEMOCRATIC STRATEGIST: I'm old enough to remember when we as Democrats thought we had a significant advantage in digital and targeting in data and all that kind of stuff ahead of the 2016 election. And lo and behold we were lapped by the Republican operation, the Trump operation on this.

(END VIDEO CLIP)

BREAM: How did that happen?

LANE: I have to say it's a little bit over my head because I'm in the generation that doesn't know that much about data. But I will say this. I think part what went wrong with Hillary Clinton and data was that they modelled the electorate the wrong way and they put their resources in the wrong places, and she didn't go to Wisconsin because they told her they had Wisconsin locked up and all that kind of stuff.

But this is really inside baseball to voters. Who has the data, and we are not even in 2019 let alone 2020 yet. I understand why the Republicans have been blast emailing this story out to all journalists because they want to change the narrative a little bit. The truth of the matter is Tom Perez is right. The Democrats are back. They did just won a big victory and put the Republicans back on their heels in this last fall. And I guess the frustration of Tom Perez must be, gee, guys, we are going great now.  Everything is fine. I presided over the victory would be his point. So why aren't you listening to me and following my suggestions?

And I do think Mollie has a part. Part of what's going on is that lingering distrust of the DNC left over from the whole fight between Bernie and the left and Hillary and the center. But I think Democrats other than this little spat are doing pretty well right now.

BREAM: I heard from a number of those delegates on the floor of the DNC, very, very angry about how the way the data and everything else was handled with the DNC finances as well. So we'll see if they get this ironed out.  And listen, you know we've been on 2020 since the midterms, since before the midterms. This election is well under way. All right, thank you all very much.

Stick around. When we come back, a surprise visit from the president.

(COMMERCIAL BREAK)

BREAM: Finally tonight, President Trump made a surprise visit to Arlington National Cemetery. He was there as volunteers participated in Wreaths Across America. Every December the organization places wreathes on the graves at veterans' cemeteries. If you ever get a chance to do this, you should. It is an amazing day. This even this year was the 27th at Arlington, honoring the men and women who have served in the military.

That is it for “Special Report” tonight. I'm Shannon Bream in Washington. I will see you back here in D.C. 11:00 for "Fox News @ Night”. "The Story with Martha MacCallum” starts right now. Hey, Martha.

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